Method and system for investment trading venue selection

Abstract

There is disclosed a method and system for scoring and selecting investment security trading venues using a computer-based advanced trade order management (ATOM) system. An ATOM program is launched on a user computer. Trading venue execution data and market condition data are processed post-trade at the trader location to compile or update a trade report for the plurality of the trading venues dealing in a particular security. In a pre-trade analysis conducted by the ATOM system prior to executing a trade order, trading venues are ranked according to their trading performance. The rankings are displayed in order of the highest performing venues, to enable the user / trader to select an optimum trading venue for an investment trade.

Description

CROSS-REFERENCE TO RELATED APPLICATION [0001] The present U.S. Patent Application claims priority from earlier filed U.S. Provisional Patent Application Ser. No. 60 / 519,045, filed Nov. 11, 2003 and entitled “Method and System for Intelligent Trade Order Management.”BACKGROUND OF THE INVENTION [0002] 1. Field of the Invention [0003] The present invention generally relates to managing investment trade orders and, more particularly, to an advanced trade order management system and method that analyzes post-trade results to facilitate trading venue selection and reduce trading costs. [0004] 2. Description of the Prior Art [0005] Investment securities trading is rapidly moving in the direction of electronic execution. Technologies such as Electronic Communications Networks (ECNs) and crossing networks have changed markets and fragmented the locations where shares are offered and bids placed. Among these locations are market centers and trading venues. Generally, market centers are the st...

AI Technical Summary

Benefits of technology

[0011] Accordingly, there are disclosed methods and systems for scoring and selecting trading venues using a computer at a user location running a program to provide an Advanced Trade Order Management (ATOM) system. Post-trade analysis results for a specified investment are input to a post-trade interface. Trading venue execution data and market condition data from a market feed are input to the system from the post trade interface, processed, and compiled to form factor tables for storage in an aggregator database. A trade report is compiled from the factor tables in the aggregator database for a plurality of trading venues dealing in the specified investment. In a subsequent pre-trade analysis performed prior to placing a trade order, the trade report is accessed and venue performance is scored and displayed on a user monitor, ranked in order of highest performing venues.

[0012] In another aspect the system is operable over a communication network for making trading venue routing recommendations. A server is coupled to a communication network via a network interface. A first memory is coupled to the server, having stored therein an Advanced Trade Order Management (ATOM) system program, wherein the ATOM system program is operable to evaluate trading venue performance and rank the trading venues accordingly.

Problems solved by technology

While these trading venues continue to improve, there is no verifiably independent measure of how they perform beyond comparison to daily Volume Weighted Average Price (VWAP).

Large entities on either side of the trading transaction are more likely to have networks of computing systems and software adapted to managing the trading activity, systems that are expensive to install and maintain.

However, smaller trading entities typically lack the resources for such elaborate trade order management systems and must resort to processing and analyzing their trading activities by less efficient means.

This reduced efficiency negatively impacts the cost of trade and hence the competitiveness of the trading entity.

This can be—and often is—a time-consuming and essentially manual process.

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